Kathy Gigac, Managing Director & Principal, Avison Young

Kathy Gigac, managing director and principal of Avison Young, spoke with Invest: about how workforce expectations are reshaping commercial real estate, the Triangle’s competitive advantages, and the importance of mentoring the next generation of industry leaders. “It is easy for people to feel discouraged or sit on the sidelines, but I always try to look for the opportunity in every situation because there’s opportunity in everything,” Gigac said.

What changes over the past year have most influenced how businesses make real estate and location decisions in the Triangle?

The biggest trend, particularly in the office sector, continues to be the focus on trophy assets and spaces with amenities that help bring employees back into the office. Companies are looking for developments that create a live-work-play atmosphere.

Even if those spaces are more expensive, tenants may ultimately take less square footage because of flexible work models. Being in places with restaurants, shopping, and other amenities nearby has become more important. Suburban office properties are also elevating their offerings by adding gyms, cafes, meeting spaces, and similar amenities within buildings. 

Overall, owners are trying to improve properties because that is what tenants are looking for today.

How have workforce considerations become more connected to real estate strategy?

Twenty years ago, office decisions were often based on where the CEO lived. Today, companies are thinking much more about what is important to employees. Businesses do not want turnover because it costs money. Companies are trying to create environments where employees want to be, and that has shifted how they approach location and workplace decisions.

What are companies prioritizing today when selecting industrial space in the Triangle?

Industrial needs are business-specific. Clear heights are important for many users, and outside storage can also be critical. Industrial outside storage is difficult to find in this market and is in high demand.

The amount of new industrial and flex construction has improved the quality of product available, but it has also increased costs. Base rents have risen significantly, so companies are being more mindful about where they need to be and what they truly need from a facility.

Which industries are creating the strongest demand for commercial real estate in the region?

Life sciences continues to create major demand. There have been several recent announcements from companies deciding to establish operations here, and that has created significant momentum.

When those companies come into the market, they also attract businesses that support them and want to be nearby. That creates additional growth and demand across multiple asset classes.

What advantages are helping the Triangle stand out against competing markets nationally?

One of the biggest advantages is the workforce. The universities in this market continue producing impressive talent, and that is extremely important for companies evaluating locations.

The cost of living, while it has increased, is still more affordable than gateway cities. Quality of life is also a major differentiator.

I am originally from the North, and living here is different from living in a market like Pittsburgh. The Triangle offers access to the mountains, the beach, and a strong overall lifestyle. There is also constant growth and new development happening.

The Southeast overall has benefited from inbound migration, and North Carolina has certainly benefited from that trend as well.

Where do you see the greatest need for infrastructure or public investment to support future growth?

Transportation infrastructure will continue to be important. The region has talked about light rail for years, and there are now bus system improvements being planned that could help reshape how people move around the market.

If there were better alternatives to everyone driving into Research Triangle Park every day, that would help commute times significantly. I think those transit improvements will have a positive impact over time.

How do you see the Triangle’s commercial real estate market evolving over the next several years?

I am bullish on this market. There are several asset classes where vacancy remains extremely low and additional product is needed.

Retail is a good example. Vacancy is in the low single digits, and many retail projects are already 75% to 80% pre-leased before construction is completed. That means little space is actually coming to market.

The flex market could also use more inventory.

Additionally, there are some obsolete office buildings that will likely need to transition into different uses. There is older office inventory in the market that may no longer serve today’s needs.

I do not think we will see widespread office-to-apartment conversions here as some other cities have discussed, but there are certainly opportunities for older buildings to become something more useful for the community, whether that is retail, mixed-use, or another type of redevelopment.

What will be most important for Raleigh-Durham to maintain its momentum as one of the country’s leading business and investment markets?

We need to continue doing what we are doing and remain one of the best places to live. That is what allows us to stay competitive with the rest of the Southeast. I wouldn’t change much.

What are your top priorities for your team over the next few years?

One of the most important priorities for me is mentoring the next generation of professionals entering commercial real estate.

I have reached the stage in my career where I recognize that many of the senior people in the industry today will not be in the room 10 years from now. It is important to help develop the people who will carry the industry forward.

Over the last few years, we have brought in strong talent, including recent graduates who are interested in commercial real estate careers. What I appreciate about our office is that we have many senior professionals with decades of experience who are willing to mentor younger team members.

It is not just one person helping. It is a collaborative environment where experienced professionals are lifting up and supporting the next generation.

What final thoughts would you like to share?

Mentorship is extremely important to me, especially for younger professionals entering the workforce today. Even in a down market, there is opportunity. It is easy for people to feel discouraged or sit on the sidelines, but I always try to look for the opportunity in every situation because there’s opportunity in everything.